His point is valid. Does the GOP look for "moderates" in the nomination process, or 3 years BEFORE that process? No.
I think that alone reveals a structural weakness in the Democratic Party that is tough to overcome no matter which way they go, moderate or liberal. There are problems either way, but the primary process gives the liberals a massive edge in getting the nomination. You either spawn a 3rd party candidate or lose because you're too far left.
The ideal Democratic candidate would be fairly liberal but yet popular because of his or her charisma and communication ability. They accidently stumbled upon such a candidate- Bill Clinton- that had the fortune of running against a "centrist" Republican that had already lost his base by 1992.
Ultimately, I don't see any Democrat as especially formidable if they don't meet that basic description (though they don't have to be a Bill Clinton in terms of political savvy or, obviously, intellect).
Bayh, Warner, etc. all flunk-- actually on both counts, because they are more moderate than the Democratic base while not engaging personally. If the incentive structure favored moderates, they would always win the nominations from their respective parties.
In other words, this isn't random speculation, this is empirical proof. Bayh will not be the Democratic nominee for President, neither will Warner, neither will Schweitzer. Their best shot is probably someone like Vilsack, though a number of Republicans would trounce him.
He's got a point.